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A DDRESS OF PRESIDENT TAFT 

AT THE BANQUET GIVEN IN 

HIS HONOR BY THE AMERICUS 

CLUB, PITTSBURG, PA., MAY 2, 

1910 q ^ fl ^ 



I 



A DDRESS OF PRESIDENT TAFT 

AT THE BANQUET GIVEN IN 

HIS HONOR BY THE AMERICUS 

CLUB, PITTSBURG, PA., MAY 2, 

1910 ^ § q q 






By Transfer 
AUG 3 1914 



\ 



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Mr. Chairman and Members of the Amerieus Club: 

It is now a number of years since I had the pleasure 
of participating in the Grant Day banquet of tliis Club. 
But I remember with distinctness the hospitality and 
enthusiasm of your members, which do not seem to have 
lost anything in the lapse of years. The toast to General 
Grant has been assigned to an orator who has shown 
himself by his magnificent oration how well chosen he 
was; and 1 shall not take your time in referring to the 
great qualities of that silent soldier, which seemed framed 
by Providence to meet the great exigencies of the Civil 
War, when our country was apparently in the throes of 
dissolution — qualities which restored victory to the armies 
of the Union and brought about the peace which Grant 
proclaimed and loved so well. 

1 am greatly indebted to the State of Pennsylvania, to 
the city of Pittsburg, and to the Amerieus Club for giving 
me that gentleman who sits at the head of my Cabinet 
table, and who, in the exercise of the ability and learning 
which brought him to the head of your bar and which 
distinguished his service as Attorney-General of the 

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United States and as a Senator in the Congress from 
Pennsylvania, has given wise counsel of the utmost value 
in guiding the course of the administration, beset with 
many difficulties. As the law officer of the Government 
who conducted to a successful issue the greatest of the 
cases in which the meaning and limitations of the anti- 
trust act were considered, and who by his successful 
advocacy called a halt upon the movement which threat- 
ened a merger of all railroads in the hands of one syn- 
dicate, he took his place among the statesmen of the 
country, and, while respecting the rights of capital and 
the great advantage of its efficient organization, was alive 
to the danger to the public weal which lies in the sup- 
pression of healthful competition and in the abuse of the 
privilege of organization to secure private monopoly and 
excessive profit. 

As the head of the great State Department, having 
in its charge our foreign relations, Mr. Knox has shown 
the same capacity for guarding the interests of his 
clients — the United States and her people — in dealing 
with foreign nations as he did in protecting their rights 
against the unlawful encroachments of domestic combi- 
nations of capital. 

The department of foreign affairs in a government, 
if it is useful and successful, is not generally very spec- 

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tacular, and it requires a recital of its work. Its Iri- 
iimphs are peaceful negotiations leading to agreements 
recorded often, not in the ratification of treaties, but in 
the acquiescence of correspondence iind not luTalded 
to the world as what they often really are— important 
steps toward the universal peace of nations. 

In the first place, 1 ought to mention that the State 
Department until this last year has never been properly 
organized. This was not due to the lack of desire on 
the part of former Secretaries of State, but it seemed 
as if Congress had not understood the importance of 
increasing the instrumentalities of the Department, so 
that the growing interests of the Government in all 
parts of the world might be cared for by different divi- 
sions, with competent experts in each, entirely familiar 
with the parts of the globe respectively assigned to 
them for consideration and action. 

Under the appropriations of last year, secured from 
Congress by Mr. Knox, the Department has now a Divi- 
sion of Latin America, a Division of Far Eastern Aff:iirs, 
a Division of Western European Affairs, of Near Eastern 
Affairs, and a greatly expanded Bureau of Trade Rela- 
tions. In this way it has specialists who have served 
in each part of the world and know it directl\-, and 
who give their whole attention and their specialized 

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knowledge and experience to our interests in that part 
of the world. They are at the disposition of American 
business men and business firms desiring to enter new 
fields of trade, and are prepared to give unlimited time 
to the instruction of American representatives, whether 
new appointees or transferred to new posts. 

Under the law of 1906, and with the assistance of 
Mr. Roosevelt and Mr. Root, a merit system of selection 
and promotion was introduced into the Consular Service 
of the United States; and in the spirit in which that 
reform was projected it has been carried forward in this 
administration, so that 1 do not think that there can be 
any doubt that the consular system of the United States 
is now on a better basis and more effective for the 
purposes for which it was organized than ever in the 
history of the country. In addition to this, under an 
Executive Order suggested by Mr. Knox a similar sys- 
tem of examination and promotion by merit has been 
adopted in the Diplomatic Service, reaching up to the 
grade of ministers, and including all the secretaries and 
other subordinates of our embassies and legations. This 
has tended directly to stimulate the ambition of those 
who are now in the service and worthy to stay there, 
' and to eliminate therefrom the drones and idlers that 
sought this branch of the service as a sinecure. 

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For the first time in the history of our country Con- 
gress adopted the plan of a maximuni aiul niiiiiinuni 
tariff, the maximum beino; 2s per centum greater than 
the minimum. Heretofore we had but a single rigid 
tariff, and in dealing with countries that' had two tariffs 
or three we had no advantage to offer them in securing 
from them the benefit of the lower rates. The tariff 
bill was signed the 5th of August, 1909, and, according 
to its terms, it was required of the Executive— and that 
means the State Department, with assistance from tarifl 
experts whom the President might directly appoint— to 
investigate the tariffs and trade regulations of every 
nation in the world with whom the United States had 
any commerce whatever, to determine whether in any 
of these respects there was undue discrimination against 
the trade of the United States in f:wor of the trade of 
some other nation and by negotiation to seek to end 
it; and if unsuccessful to allow the maximum tariff to 
go into operation. All this had to be done, and the 
negotiations to secure the removal of such discrimina- 
tions as were found had to be completed and proclama- 
tions issued announcing the result before the Msi of 
the following March. The work has been done by 
Mr. Knox and the State Department, and has been 
well done. We have succeeded in securing from all 

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countries substantially their minimum tariff, or, if not 
their minimum tariff in terms, such concessions as to 
be equivalent to the benefits under the minimum tariff 
denied to us. 

One hundred and thirty-four proclamations have 
been issued, attesting the fact that under the present 
conditions there is no undue discrimination against the 
trade of the United States by any country with which 
the United States has commercial relations. Germany 
has granted to all American products her complete and 
unqualified conventional or minimum tariff rates, and 
has abolished her former restrictive regulation which 
required imports of American pork meats to be accom- 
panied by certificates showing their microscopical 
inspection in the United States, thereby removing the 
obstacle which had effectually prevented their entry 
into the German Empire. 

France granted to American products her minimum 
tariff rates on about 97 per cent of her total importa- 
tions from the United States, thereby giving equality 
of tariff treatment, for the first time, to numerous classes 
of important American commodities, such as agricul- 
tural implements and machinery and machine tools; 
and, in addition, made certain concessions in regard to 
inspection which were deemed to be equivalent to the 

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small percentage withheld from us of her minimum 
tariff. 

The Government of Austria-Hungary abolished its 
restrictive regulation affecting the importation of Ameri- 
can pork meats, so that these products henceforth will 
be admitted when accompanied by the ordinary federal 
certificates of inspection. 

Greece reduced by one-half her former high duties 
on lubricating oil and cotton-seed oil, both largely 
imported from the United States, while Brazil added 
several commodities to the list of American products 
entitled to the preferential reduction of 20 per cent. 
Other countries have made specific improvement in 
their laws and practices affecting the American export 
trade as the direct result of these negotiations. 

With Canada there was a grave question as to whether 
the extension to many other countries of the benetit of 
the rates of the reciprocity treaty between Canada and 
France, which are from 2>^ to s per cent less than the 
so-called normal rates charged against imports from this 
country, was not an undue discrimination against the 
United States. To avoid this result, Canada reduced the 
tariff on some thirteen numbers, embracing substantially 
all those articles in respect to which there was any com- 
petition between the United States and the favored 

(9) 



nations in the Canadian market. The Canadian settle- 
ment was accompanied by an exchange of notes indicat- 
ing the willingness on the part of each Government to 
enter into future negotiations looking to closer commer- 
cial relations between the United States and Canada. It 
is the view of the administration that a peculiar relation 
existing between Canada and the United States, with a 
boundary line of 3,000 miles in extent between them, 
justifies a different policy as to imports and exports 
between the two countries from that which obtains in 
regard to European and oriental countries, and that if by 
reciprocal arrangements, we can make the commercial 
bond closer it will be for the benefit of both nations. 

Several treaties negotiated by Mr. Root in the pre- 
vious administration for the settlement of long-standing 
controversies with Canada have now been ratified, and 
the peaceful adjustment of our commercial relations was 
a fitting climax. They all constitute the establishment 
of greater friendliness between the United States and 
her rapidly growing and very prosperous neighbor to 
the north than ever before in the history of the two 
countries. 

The example set by the last administration, with 
Mr. Root at the head of the State Department, in cul- 
tivating good relations with all the South American and 

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Central American Republics has been followed closely 
by Mr. Knox and the Department under him. I say 
this deliberately for the purpose of meeting suggestions 
and criticisms that there has been a departure from 
such policy, and 1 venture to affirm that never before 
in the history of the country have our relations with 
South American and Central American Republics been 
more friendly than they are to-day. 

We have just appointed a commission of men of 
the highest character and ability to represent us at the 
Fourth Pan-American Conference, to be held at Buenos 
Aires on this the one-hundredth year of the independence 
of most of the South American Republics. We have 
signified our sense of the importance of the celebrations 
of their one-hundredth anniversaries which are to take 
place in the various South American countries by dele- 
gating some of our most prominent citizens to attend 
as special representatives of the United States. We 
have just celebrated with proper form, suited to the 
importance of the occasion, the dedication of the beau- 
tiful building in which is housed the Bureau of American 
Republics, to act as a clearing-house and to facilitate 
exchanges of opinion and trade and good will between 
all the Republics of this hemisphere. 

(") 



By tact and diplomatic guidance a war between Peru 
and Bolivia was avoided, and not a little of the credit 
for reaching an honorable and pacific settlement was 
due to the sensible and straightforward suggestion of 
our Secretary of State. Again, through the same assist- 
ance, an obstacle to the taking part by Bolivia in the 
Pan-American Conference at Buenos Aires has been 
removed. 

The boundary dispute between Costa Rica and Pan- 
ama was lately settled by the friendly offices of Secretary 
Knox, and a convention signed providing for arbitration 
by the Chief Justice of the United States. 

Relations between Peru and Ecuador are at present 
strained, due also to a boundary dispute, in which acri- 
monious feeling has been developed on both sides, and 
in regard to which our peace-making Secretary of State 
is bending his energies to bring about a solution honor- 
able to both parties. 

The fact that in respect to the claim pending against 
one of the South American Republics our State Depart- 
ment took a firm stand and insisted on a settlement is 
not to be regarded in the slightest degree as an evidence 
of our lack of friendship for that Government or our 
earnest desire to maintain the friendliest relations with 
all South America. But a Secretary of State of the United 

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states would be recreant to all the proper rules governing 
his duty if he neglected the just rights of American citi- 
zens in dealing with any country, however important her 
friendship. 

The course of our State Department with respect to 
certain small Central American States has been subjected 
to criticism, which to me seems wholly unwarranted. 
Turbulence and unstable conditions in Central America 
have been a perennial occupation to the Department of 
State. By the Washington conventions, to which the 
United States morally has the relation of a party, it was 
sought to guarantee the neutrality of Honduras, because 
it has always been felt that a strong and stable Honduras 
stretching across the center of Central America would 
contribute more than anything else to the progress and 
prosperity of the five Republics, the peaceful welfare of 
which the United States has always promoted. Hon- 
duras has a heavy foreign debt and its finances are dis- 
organized. American citizens have now an actual interest 
in the railways and wharves of the country. An Ameri- 
can banking house has finally undertaken to refund the 
debt, rehabilitate the finances, and advance funds for rail- 
way and other improvements contributing directly to the 
country's prosperity and commerce. Such an arrange- 
ment has long been desired and our State Department 
is cordially supporting the project. 

(13) 



The great disturber of Central America in recent years 
has been Zelaya, the tyrannical and unprincipled Presi- 
dent of the Republic of Nicaragua. With respect to 
every plan for the promotion of pacification and friendly 
relations between the five Republics, he played the part 
of marplot. When his brutal and cruel exactions drove 
a part of the people of Nicaragua into rebellion and an 
extended civil war, he violated the laws of war and the 
rights of American citizens who had regularly enlisted 
in the ranks of the revolutionists by taking their lives. 
He thus gave a right to the Government of the United 
States to demand reparation and, by reason of the char- 
acter of his Government— exemplified by this cruelty 
toward American citizens—to withdraw all diplomatic 
relations by a letter of Secretary Knox which gave full 
reasons therefor, and which notified the contending 
forces in Nicaragua that the United States would hold 
each one to strict accountability, were the rights of 
American citizens further outraged. American forces 
were sent to both coasts of Nicaragua to be in readiness 
if occasion should arise to protect Americans and their 
interests. It is undoubtedly true that the attitude of 
the United States toward Zelaya so injured his prestige 
and brought him so clearly to the bar of the public 
opinion of the world as an international criminal that 

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he was obliged to abdicate and leave his Government 
to a better man. It is hoped that the war between 
the factions is now drawing to a close, and that a far 
better Government may be established, which shall have 
regard to the interests of its own citizens as well as ot 
those of friendly nations. The leaders of both factions, 
Madriz and Estrada, have admitted the unjust character 
of the killing of Groce and Cannon. This Government 
must consider at the proper time calling upon the Gov- 
ernment of Nicaragua, when one can be recognized, to 
make such reparation as shall seem to be just for this 
violation of American rights, and to give adequate 
guaranties for the future observance and strengthening 
on the part of Nicaragua of the Washington conven- 
tions. Meanwhile, pending the working out of the 
Nicaraguan situation, we have saved further invasion 
of American rights and have indirectly accomplished the 
elimination of Zelaya and of Zelayaism. 1 think anyone 
who will analyze the Nicaraguan policy will see that it 
has brought about its exact and just and beneficent 
objects. 

The elimination of Castro, who was of the class of 
Zelaya, from the control of Venezuela has enabled us 
to settle peacefully the claims of our fellow-citizens in 
that important South American State. 

(15) 



As a confirmation of the friendly relations which now 
exist between this country and all of South America, 
Argentine has placed the contract for two battleships 
and certain additional naval armament, amounting in 
money value in all to about $23,000,000, and there is rea- 
son to believe that we shall have further contracts of a 
similar sort placed in the United States by other South 
American governments. The opportunity to get this 
business was brought about directly by the untiring 
efforts of the Department of State, and this could not 
have been achieved but for the reorganization of the State 
Department, and by means of a liberal appropriation of 
Congress, and the consequent energetic direction of the 
reformed Consular Service and the Diplomatic Service, 
reorganized last year. 

The theory that the field of diplomacy does not 
include in any degree commerce and the increase of 
trade relations is one to which Mr. Knox and this 
administration do not subscribe. We believe it to be 
of the utmost importance that while our foreign policy 
should not be turned a hair's breadth from the straight 
path of justice, it may be well made to include active 
intervention to secure for our merchandise and our 
capitalists opportunity for profitable investment which 
shall inure to the benefit of both countries concerned. 

(16) 



There is nothing inconsistent in the promotion of peace- 
ful relations and the promotion of trade relations, and 
if the protection which the United States shall assure 
to her citizens in the assertion of just rights under 
investment made in foreign countries shall promote 
the amount of such investments and stimulate and 
enlarge the business relations, it is a result to be com- 
mended. To call such diplomacy "dollar diplomacy," 
and thus apply to it what is deemed by the authors 
of the phrase an expression of contempt, is to ignore 
entirely a most useful office to be performed by a 
government in its dealings with foreign governments. 
Such diplomacy gives to the merchants of other coun- 
tries in the competition for the trade of the world an 
advantage which their own governments are only too 
glad to offer to them, and which our Government 
ought not to deny to her own merchants, manufactur- 
ers, and capitalists. 

Our trade has grown quite beyond the limits of 
this country. With an annual foreign trade exceeding 
$2,000,000,000, our State Department could not vindi- 
cate its existence or justify a policy which in any way 
withheld a fostering, protecting, and stimulating hand 
in the development and extension of that trade. 

In pursuit of such policy it is often desirable that 

(17) 



the loan of American capital to a foreign government 
be made. The Government measures its support of 
the enterprise for which the loan is made, not by the 
profits of our capitalists but by the broad national 
advantages to be expected. It is easy in such cases 
for the Department of State to secure conditions which 
will insure the benefit to this country, as, for example, 
if the loan be for public works in stipulations for the 
purchase of materials in the United States. 

There is promised great railway development in the 
Empire of Turkey, and our State Department is using 
such proper efforts as it may to assist American con- 
tractors and constructors in securing the contracts for the 
making of these railroads. I need hardly say what a 
benefit that would confer in the inevitable purchase of 
materials for the work of construction in the performance 
of such contracts. 

In our agreements with China we have provisions 
whereby the Chinese Government promises to reform its 
currency and to abolish likin, a mode of internal taxation 
which weighs against our trade, and to give a share of 
railway loans to American capital. Early last year it 
developed that three foreign Governments were about to 
conclude a loan to China for the construction of a great 
railway system in the heart of the Yangtze Valley, and 

(i8) 



that the likin revenues were to be hypothecated to the 
foreign lenders, and that railway materials purchased 
abroad were to come from the lending countries. It was 
seen that our direct treaty interests in the likin question 
would be jeopardized unless American citizens also had 
a direct interest in these revenues as security for the loan. 
It was further plain that American manuf^icturers and 
merchants would lose an important opportunity and mar- 
ket. As a result of nearly a year's negotiation, American 
participation in the loan and jn the sale of materials for 
the railroad has been assured. 

Again, the representative of a group of American 
bankers, acting also for an English construction company, 
secured a contract for the financing and building of a rail- 
way from Chinchou north to Tsitsihar and to Aigun on 
the Amur River, passing from Manchuria through Mon- 
golia and meeting the Russian Trans-Siberian Railway. 
As this enterprise would open up a large new field in the 
Chinese Empire and would directly and indirectly benefit 
both Chinese and American commerce, this Government 
agreed cordially to give the enterprise the support which 
it might legitimately furnish to beneficial American enter- 
prises in foreign countries. 

In the course of this negotiation Secretary Knox 
advanced a proposal by which capitalists of Russia, 

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Japan, and other nations, including the United States, 
should join in advancing to China the sum necessary 
to enable that Government to take over the railroads of 
Manchuria, and to manage them upon a business basis 
free from all suspicion of ulterior political motives or 
of discriminations. This proposal has not met with the 
approval of all the nations to whom it was made, but 
that it may ultimately be the basis for assuring the 
peace of the Orient we have not lost hope. The con- 
ception of Manchuria as a buffer state in which the 
railways should be under the control of representatives 
of all the nations, and not policed by the armies of 
any, is certainly most useful, and one which if it could 
be realized would be fruitful of permanent peace. As 
for the Chinchou-Aigun Railway, the Japanese Gov- 
ernment is now prepared to cooperate in its construc- 
tion, and the enterprise is in a stage of satisfactory 
negotiation. 

The policy of the ''open door" was inaugurated by 
this Government while John Hay was Secretary of State, 
and had its inception in a note circulated among the 
powers by him. It has been the intention and purpose 
of this administration to conserve and maintain that 
policy as far as possible, and we can not look with satis- 
faction or quietly acquiesce in a silent defeat of that 

(20) 



policy in the actual measures adopted by any of the 
governments interested in the Orient. 

The Chinese Government and people are passing 
through a marvelous stage of transition from ancient 
to modern methods, and in this progressive v/ork of 
development there is no country to which China looks 
with more friendly reliance than to the United States. 
The State Department may, therefore, well foster the 
use and investment of American capital which operates 
for the establishment of legitimate American business 
interests in China and for the welfare of that great 
Empire and which gives us a legitimate standing in 
maintaining the integrity of China and conserving her 
just rights. 

It is the purpose of our State Department to insist 
upon a respect for the just claims of American citizens, 
wherever they may be. These can not be sacrificed 
to any policy. We must use every effort to give a 
full measure of protection in our own country to the 
rights of foreigners of whatever nationality or race, and 
in our dealings with other governments to combine a 
patient insistence upon our rights with a scrupulous 
respect for theirs. In this way the great work of 
making world peace is carried on, and such a course 
contributes quite as much to this end as arbitration 

(21) 



treaties and other instrumentalities by which in more 
conspicuous ways war is rendered less and less possible. 

Among the direct contributions to the cause of peace 
1 am glad to call your attention to the fact that Secretary 
Knox has broached to the powers a project for evolving 
a general Court of Arbitral Justice out of the theory of 
the Prize Court Convention drawn up at the last Hague 
Conference. The proposal has had a most sympathetic 
reception from many of the powers, sufficient, we hope, 
to secure its success, and we feel assured that in the not 
distant future it will take tangible form and result in a 
forum always open to all nations, having a confidence in 
the justice of their respective causes, which will make 
them willing to substitute, in the settlement of contro- 
versies, the deliberate and righteous judgment of an 
impartial tribunal for the antiquated method of force. 

To the record of a year's accomplishments under Sec- 
retary Knox in our foreign affairs 1 think 1 may properly 
point with pride, and yet with becoming modesty, for it 
is his work and not mine. All 1 can claim is the merit of 
selecting him for the task. 

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LIBRARY OF CONGRESS 

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